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Could you explain the logic or rules for entering trades based on this template? It seems like there are other similar consolidation setups on the chart as the ones at which you initiated your trades.
Yes you are right. There are other potential entries on those charts as well. I have no idea why I did not take them other than I may not have been in my chair at the time or there was something on the live chart that did not convince me to take them or what.
I'm not taking every opportunity for an entry either.
Also, please see my next post for more explanation of kind of or sort of what I'm doing.
It's all price action. What looks good on one entry may not look good on the next. It just depends on what the market is showing at the time. Static charts can't tell you the same thing that a live chart can...I know...that's a big DUH!!! I'm not trying to be evasive to protect some trade secret. That's just the way it is.
I should've anticipated the request for rules and said something up front. I've certainly been around long enough to know that would be asked. Bottom line is this. It's price action based on the 5 minute, 1 minute, and 150 tick charts that are overlayed. When I say price action, I do not mean candlestick patterns or anything of the sort. What's a long candlestick pattern in one timeframe is another timeframes short candlestick pattern. So, what good is that. I am living in the here and now trying to get 19 ticks each time I enter.
I'm basically looking for,
1. direction of the entry based on the 5 minute, looking for HL and LH is basically it. also don't think that because i said i'm looking for HL and LH that I mean that literally. in one case it may be literally a HL or LH but in other cases it may not be. there are statistical outliers that can invalidate a HL or LH but yet the market direction hasn't changed.
2. look for the 5 minute to consolidate or compress
3. watch the 1 minute and 150 tick behavior inside that compressed area. i'm looking for direction of the 1 minute and 150 tick inside the 5 minute bar to make sure they all agree.
4. notice how the momentum is building. many times you will see a build up of activity that takes price against your potential entry, meaning if going long, you will see increased activity that causes price to go down which might fool you into thinking it's a short entry. but i'm going long so i do not take the bait because the 5 minute says look for longs. so i wait for that activity to play out and look for price to go back up for the long. i enter 1 tick above/below the previous 5 minute candle maybe...sometimes i may take it a bit differently. it just depends on what i see at the time.
NOTE: items 1 through 4 is not an all inclusive set of rules that i use. they are examples and only the tip of the iceberg so to speak. There is no way I can document everything I look at because what I do in a particular case is situational or conditional if you will...What I see this time might not apply the next time.
Honestly guys I'm not going to spend much time explaining myself on these entries because it just isn't that important. What's important if you're truly interested in the charts is to put one up and start watching it in a LIVE market to see what the market is telling you. Besides, that's not why I started posting these charts. I started posting them because for years now, I wanted to see inside the 5 minute and 1 minute candles in a way that I could really use it without having 3 or more charts up. I developed my own indicator as I described in earlier posts that plotted the 5 minute candle on whatever timeframe chart I wanted to look at. That worked well but it just isn't as flexible as I wanted it to be and was too lazy to modify the code. Then with NT7 recently I started experimenting with the multitimeframe charts and had this "revelation" that I can do the same thing without my indicator and do even more.
By the way, this method is something I've been working on for quite some time now. All the work prior to this "revelation" about NT7 leads me to what you see in these charts. If you remember I started a thread called the 5 minute odyssey. This is a continuation of that in many ways just without the indicators.
Oh yeah, I know the next question will be what I use for stop and target. The only thing that is hard set at this point is the target. When I see CL building for an entry, based on experience with CL and CL alone, I know that price will move at least 20 ticks. So, I use 19 tick targets. CL does 20 tick moves very well and sometimes goes well beyond 20 ticks but more times it does 20 ticks and consolidates before it moves any further. I want to have my 19 ticks and be out of the market waiting for another entry than sitting through that consolidation if possible. Coming out of that consolidation may be another entry and I can get back in if I want to. My stop is dependent on what I see as support/resistance. If those lines are too far from my entry then I will most likely pass.
Now I anticipate some will say I don't have rules and can't reproduce the success for long. Well you're right in a sense about the rules. What I have in this single little chart is a framework that I can work inside of. This framework gives me the opportunity to identify pretty easily the times I need to focus. I can get up to speed pretty quickly by looking to the left of the chart to make sure I'm not overlooking something but then get back to the right side of the chart and watch for the entry.
One last thing and I will stop this dissertation. I added volume to the bottom of the chart because I have always watched volume as one of the guages of market activity. Please don't ask for details on how I use it because it is just as situational as what I describe above. Additionally, I added 2 moving averages to my price panel, SMA(8) and SMA(40). They are only there as a visual. I make NO decisions based on them. Again, no decisions are based on the moving averages.
That is all. I tried to anticipate the questions but I know there will be others looking for specifics. If I can actually give you specifics I will but more than likely I won't be able to not because I'm being evasive but because it won't make sense.
Another setup I like because I also use the BetterRenko brick is a 1 minute overlaying a 10 BR.
On this setup I use the BR as the master of the universe so to speak and look for zigzag with entry in the direction of the zigzag. That's basically it. Certainly not mechanical.
Does anyone besides me find this type of chart useful at all? I have 3 chart setups that I'm using and like each one for different reasons. Not sure if I'll settle on just using one or continue using all 3. I'm doing well with all 3 and not taking ALL entries for sure. Waiting for what I consider to be a high probability entry.
I'm testing it using the 5M and 1M time frames. I couldn't get my eyes to comprehend all the colors and such when also using the 150T overlay. Maybe with some more screen time, my eyes could adjust. I'm really starting to like this concept. I've always struggled looking at multiple panels. This way one panel, two time frames. Very easy to watch.
I did the same thing with the 5/1 min setup. Took the 150 tick off. I like it better this way. Found that the 150 tick really didn't add much to the picture other than clutter.
You can obviously do the same thing with multiples of tick and volume...
cool now that's what i'm talking about. i got rid of other charts today that I've been watching forever because these multitimeframe charts simplified everything considerably.
